Becoming a Licensed Sponsor

The UK is currently facing a labour shortage, economists say the explanation for the current strength of the labour market is simple: demand for workers has been going up at a time when their supply has been limited. On the…

Blog17th May 2022

The UK is currently facing a labour shortage, economists say the explanation for the current strength of the labour market is simple: demand for workers has been going up at a time when their supply has been limited. On the demand side, the reopening of the economy as the pandemic loosens its grip has meant stronger competition for staff in addition, a skills shortage has meant that many companies are struggling to recruit people with the desired technical and leadership skills. On the supply side, a combination of factors, including Brexit and the Great Resignation has meant that the labour force has shrunk considerably.  

For many sectors the ability to recruit talent from overseas is imperative to meeting customer demands, launching innovative projects and growing their business. Employers have had to think of alternative ways of attracting workers and broadening their target market across the globe. 

A Home Office issued sponsor licence enables UK employers to recruit and sponsor overseas workers. We have developed a guide for employers on applying for a sponsor licence and navigating the complex Home Office rules on sponsor licence management. 

What is a sponsor licence?  

Companies who want to employ overseas nationals who are subject to UK immigration controls will need to secure a Home Office issued sponsor licence to enable you to sponsor employees on work visas. The successful overseas job applicant can then apply for a work visa, such as a skilled worker visa or intra company transfer visa.    

Hiring EU workers?  

The EU Settlement Scheme followed Brexit and the end of free movement for EU citizens. The scheme meant that EU nationals who entered the UK before the end of December 2020 could apply for pre-settled or settled status. Applications for the scheme have now closed, except for those who can provide reasonable grounds for not applying before the deadline or those who already have pre-settled status (see for more information).  

There are some circumstances where a UK based business can employ an EU national without needing a sponsor licence, namely:  

  • If the job applicant is an Irish citizen.  
  • If the job candidate is an EU national who entered the UK before 31 December 2020 and who has secured settled status or pre-settled status under the EU Settlement Scheme.  
  • The EU national has a frontier work permit.  
  • The job applicant is an EU national who qualifies for a graduate visa. 

The Home Office have developed a useful tool for checking candidates Right to Work. See  

How much does a sponsor licence application cost? 

The fee for a sponsor licence depends on the size and type of organisation. This application fee is payable every time the sponsor renews their licence (every four years). Fees are usually reviewed annually by the Home Office which publishes them on its website. 

Organisations classified as “medium” and “large” are required to pay a sponsor licence fee of £1,476. This fee would apply to all organisations which do not meet the definition of a “small” sponsor. 

An organisation would normally qualify as a small sponsor if two of the following apply: 

  • your annual turnover is £10.2 million or less 
  • your total assets are worth £5.1 million or less 
  • you have 50 employees or fewer 

Registered Charities are also considered to be “small” sponsors. 

Organisations classified as “small” sponsors are required to pay a sponsor licence fee of £536. 

Once a sponsor license has been granted, certificates are available which can be assigned to suitable overseas candidates ahead of their visa applications. Other costs should be considered when deciding to sponsor overseas workers and include Immigration Skills Charge, Biometrics appointment fee, Immigration Healthcare Surcharge and visa fees.  

How can my organisation apply for a sponsor licence? 

In order to apply for a sponsor licence, your organisation must be genuine, operating and/or trading lawfully in the UK and based in the UK. You must also meet certain eligibility and suitability criteria. 

To satisfy the criteria, you’ll need to demonstrate that the role in question is a genuine vacancy that meets the skilled worker criteria. You’ll also need to establish that your organisation is “honest, dependable and reliable” and have no history of non-compliance in respect of immigration requirements. 

There is a list of mandatory documents that must be filed in support of your application and a number of supporting documents in addition to a covering letter to provide background information about the company. 

The processing of the application by the Home Office can take up to eight weeks, so careful forward planning is required.  

Often the Home Office may require additional documents such as evidence of the company’s HR processes to assess whether the compliance requirements and sponsorship duties will be met. The Home Office may also conduct a compliance visit at the company premises. 

We can help 

AAB People can conduct an audit of your HR procedures prior to your formal application being made to identify any weaknesses and put in place an action plan to rectify them as well as assist in preparing the application form. For more information on criteria and documents required please see AAB People can assist in this process from start to finish. We have helped many clients secure their sponsor license, have assisted in the recruitment of overseas workers and provided support with researching visa options. Please do not hesitate to contact a member of the AAB People team if we can be of assistance

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